Venue: Koločep, Croatia. Date: To be announced.

Course Description and Objectives

This course is designed to provide a thorough understanding of the capital raising process, with an emphasis on emerging markets. We will start the course with identifying the different sources of finance for growing companies, and examine their advantages and disadvantages. We will then on the process of tapping the public equity markets. We will study when firm should do an initial public offering, and scrutinize the floatation process. Through a series of lectures, role play exercises, and class discussions, we will discuss the role of the investment banks, the stock market, the regulators, the buy-side clients, and the company’s management.

Expected Outcomes

Those who complete the course should be able to understand the following:

• Pros and cons of going public
• The role of the underwriter in IPOs
• Structuring the offering (lockups, overallotment options, etc.)
• Writing the offering circular or prospectus
• Pre-marketing and the roadshow
• The bookbuilding process
• Allocating the shares
• Analyst coverage
• Follow up offerings
• Rights issues
• Private Placement offerings (PIPEs)
• Shareholder Reporting, Corporate Governance

 Who Should Attend

• Senior executives
• Finance directors
• Investment bankers
• Management consultants
• Lawyers
• Auditors
• Stock market officials
• Equity analysts
• Fund managers
• Prospective investors

Course Outlines

Day 1

• Sources of Finance: bank debt, public debt, private equity, public equity, mezzanine finance
• The IPO process: preparation, due diligence, structuring the offering, the prospectus, bookbuilding, setting the price, share allocation, secondary market trading, analyst coverage
• Academic research on IPOs. Auction theory. Anomalies and their explanations
• Initial Returns. Long run performance. IPO clustering and waves
• Principles of firm valuation: discounted cashflows and the multiple method
• Guest speaker presentation

Day 2

• The IPO simulation (1): The Beauty Contest
• Teams of participants take the role of investment banks who try to win the mandate to underwrite the IPO of a fictional company.
• Due diligence
• Certification
• Price Discovery
• Underwriter Compensation
• Track Record. Empirical Evidence
• Seasoned Equity Offerings
• General Cash Offerings
• Rights Issues
• The Rights Issue Discount
• Standby Offerings. Private Placements

Day 3

• The IPO simulation (2): The Road Show and Bookbuilding
• IPO simulation (3)
• The pricing meeting, and secondary market trading
• We shall mimic secondary market using a simple software program developed by the course lecturer
• The goal is to illustrate limit order book trading, the market maker’s job, and the information aggregation process
• Debrief of the IPO exercise, and lecture on the secondary market mechanism
• Lecture on the choice of exchange.
• Dual listings and ADR issues